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Speech - Boosting the French Economy with EU Regional Funds

European Commission - SPEECH/13/616   09/07/2013

Other available languages: none

European Commission

Johannes HAHN

Commissioner for Regional Policy

Boosting the French Economy with EU Regional Funds

French Partnership Closure Conference/Tours

9 July 2013

Ministers, Presidents, Ladies and gentlemen,

It's a great pleasure to be with you today. With so many stakeholders here, I can see how much interest there is in the investment strategies that Europe is developing with France for the next funding period. AND it is essential that ALL of you are involved in designing these plans: ministries, regions, departments and municipalities, professional organisations and the social partners. The partnership principle has been at the heart of the reforms I have spearheaded for Regional Policy – so once again, it is good to be here today.

Everyone here knows what we are up against. France has not been spared in these recent difficult years. The unemployment and youth unemployment rates in your country are around the European average – but we would all wish that average to be very much lower.

Europe is facing tough challenges at home, and new competitors abroad. Our citizens can only prosper if we make intelligent investments to create the dynamic conditions in which growth can return.

What we are here to discuss today, is the use of European funds to boost the economy, and stimulate growth. Over the last three years we succeeded in shifting Cohesion Policy from an infrastructure oriented policy to an investment policy stimulating the economy as whole. That may sound obvious but I can assure you it wasn't obvious to everyone!

The new EU Regional policy is Europe in action to support the supply AND demand side of the labour market. The investments that we will make together in the coming financial period will support innovation, small businesses, and the low carbon economy, in order to promote the climate in which new companies can take root and new jobs be created.

Funds will be concentrated more rigorously on strategic priorities to boost jobs and growth, and new measures will ensure our efforts more results-orientated: with pre-agreed targets and indicators so the public can judge what is done with their money, and ex-ante conditions to ensure investments are made in the light of known factors for success.

Every regional project should be a contribution to our overall strategy to raise national and European competitiveness – that is to say the Europe 2020 strategy. Investments in your regions with EU funds will bring added value to your people locally – but they are also each a building block in the recovery for which the EU is working.

WE ARE AT A CRUCIAL MOMENT

We are at a crucial moment: THIS is the time when decisions are being taken on how the funds will be spent. As we work on the new Partnership Agreements and the programmes for the next period, let's make sure we take the right decisions to help the French regions- and let's make sure we do not delay. Informal preparations going on right now need to advance rapidly so that we can hit the ground running, and get money flowing into the real economy as early as possible in the new period.

The earlier each country can complete its partnership agreement, the earlier we can approve projects and spending can begin. France has no time to lose.

The conditions for a good start are beginning to come together:

-Member States, the European Parliament and the Commission have reached political agreement on the overall EU budget. Cohesion policy remains the second biggest expenditure item, with sufficient funds to continue to be the major source of public investment in many EU states.

-Though nothing is agreed until everything is agreed, important progress has been made in negotiations on the reform of regional policy, which should be complete in the autumn.

THE MONEY AND WHAT TO SPEND IT ON

France has come away from the negotiations with a good deal. The creation of a new category of regions between the more and the less developed, has meant nearly €3 billion more for France to invest in its regions.

One of the most significant initiatives arising from the budget negotiations is the decision to dedicate €6 billion euro to the Youth Employment Initiative. This will be frontloaded to help regions take action as soon as possible. The youth unemployment rate of the Centre Region is 28,8% and this region, together with a number of other French regions, will be eligible for funds under this initiative.

Our mission in working with you to plan the next generation of programmes is to preserve and create jobs. I want us to create an environment in which every young person looks forward not just to training, important though that is, but to real employment. Jobs, not just schemes to keep idle youth off the streets. In Italy I saw schools that were devastated by frustrated students who despite throwing themselves into their training could not find a job. This is the kind of germ that could quickly spread into a wider conflict. That's why we need to develop idea of peace, on which the European union was originally founded, into a determination to build social peace in today's Europe!

That is why we are introducing changes in the new cohesion policy to make it easier to bring funds together within a single programme – for example the Regional Development Fund and the Social Fund. All investments with EU money must be mutually reinforcing, and serve a single set of objectives.

France will decide its own spending plans, not me, and not my colleagues in Brussels. We are there to make recommendations, on what we believe are the most urgent investment priorities. As we did for every EU country, we set out our recommendations for France in a Position Paper last year:

-We believe that France would benefit from investing even more in research, development and innovation and spreading the use of the last generation of information technology tools.

-We invited France to train and retrain workers in line with the needs of the French enterprises, with particular attention to youth.

-We recommended further efforts to help small and medium sized enterprises and argued for measures to improve the sustainability of your towns and cities, bringing down energy consumption and increasing the share of renewable energy.

-Finally we made some specific proposals for your outermost regions.

Now it is up to you. We hope you will agree with the logic of our recommendations. In most regions, what we suggest simply means building on the investments carried out in the current period. In others it might mean a shift in focus. You will choose – but the aim must be to stimulate the economy, promoting growth and generating jobs. These are now the primary goals of the regional funds.

FRANCE SHOULD BE EXCELLENT – AND STAY EXCELLENT

France is renowned for the quality of its administration. This country should be a centre of excellence that others copy. And, many regions do set an excellent example.

Many are very advanced in the use of financial engineering instruments, which allow us to get more results for our money for instance through revolving funds.

Others have obtained impressive results in particular sectors, for example energy investments in housing. My colleagues recently visited Aquitaine where an investment of €30.000 per flat is bringing a reduction in energy consumption of 75%. This is the kind of pilot project that should be scaled up so that many more Europeans can benefit – and so the European taxpayer can see the value of EU investment.

Now the challenge is to make sure that excellence is maintained as France moves to transfer management of ERDF and part of the ESF to the French regional councils.

I have always been in favour of this move. But it is a little like watching the Tour de France. I am in favour of France showing its excellence once again – but I know how tough it is going to be on those involved. Make no mistake, this is going to be a demanding exercise.

The change should not be underestimated. Ask any managing authority. There are rules and disciplines to be mastered, and we need to ensure that expertise is not lost in the transfer of responsibilities.

In the months to come it is important that the state continue to provide technical support to the regions and ensure the know-how accumulated over so many years is passed on. This may involve the transfer of people, and we hope many of the key players will continue to play their part. We at the Commission are keen to see a road map outlining exactly how the handover is going to take place.

When there is change, there is new energy – and that is a fantastic asset. But it would be a mistake to start everything from scratch. Improve on your predecessors if you can – but don't assume you have nothing to learn from them.

So, my first message to the regions is the following:

Change - but only if you have to!

My second message is about planning:

Please anticipate! The secret of successful implementation is getting your timing right.

My third message to the new managing authorities is

Keep things simple. In the new generation of our programmes, we need to show to our stakeholders that we can make our procedures more user-friendly. We need a quicker processing time for the applicants and for ourselves, and we need to reduce the time it takes to reimburse. E-Cohesion is a promising new tool that can help.

My fourth and last message is:

Empower your partners, particularly cities. Managing authorities cannot do everything alone, and you will need competent and committed actors outside your own services. In particular, I'd like to point to the cities, without whom we cannot deliver on our economic, social or environmental goals under Europe 2020. You will need your towns and cities working very actively with you and the more you involve cities up front, the more they will invest in the cooperation.

NEXT STEPS

In order to be ready to launch work as early as possible in 2014, we have our work cut out. While we wait for final adoption of the new regulations, we need to advance with the informal dialogue, to save time.

We have just received a first draft of your Partnership Agreement, and we are promised the first full drafts of the new programmes by 13 September. I hope this deadline will be met, and that we can stick to our agreed timetable for work together.

From the regions, I am looking forward to a thorough and succinct analysis of your needs and opportunities. I hope you will all make full use of the Smart Specialisation Strategies to make strategic choices. Be ambitious and courageous in your choice of targets and instruments. Making the most of taxpayers' money sometimes means taking a little risk and trying something new.

Finally, a few words about the Outermost Regions. When I became Commissioner all the talk was of handicaps and problems. Now, I am proud to say, there is much more talk of opportunities and new initiatives. I recently met the presidents of the "RUPs" to discuss the Action Plans they have been drawing-up to sketch out how – with EU help – they plan to modernise and diversify their economies. This is a new approach that I firmly believe will help these regions take their rightful place in the EU – and deliver a better standard of living to the EU citizens who live in them.

Mayotte, our newcomer, will be a very welcome addition to the family of 273 European regions, when you join us formally next year. There is still a lot of work to do preparing for that – and my colleagues are always at your disposal.

To conclude, the programmes and projects that you will all help to design and implement are part of the added value that the EU brings, The new regional policy that this Commission has proposed is about essential investments to relaunch and revitalise the French economy, giving every region a better chance to hold its own in an ever more competitive world.

Europe IS its regions. You ARE Europe. If you succeed, the EU succeeds. Let us all do our utmost for both of those goals.


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